Target $0.81 (was $0.82). The broker notes the proposed alliance with Air New Zealand ((AIZ)) is expected to generate at least $15m in synergies, so the deal is seen as a positive.
At the same time management has lowered earnings expectations for FY10 and the broker sees this as weighing on the stock. Post some changes to its numbers the broker has trimmed its price target.
Buy rating retained.
Target price is $0.81 Current Price is $0.52 Difference: $0.29 If VBA meets the RBS Australia target it will return approximately 56% (excluding dividends, fees and charges).
Macquarie 04/05/2010 1 Upgrade to Outperform from Neutral $0.76 53.5%
Target $0.76 (was $0.77). The company has indicated full year earnings are likely to be towards the lower end of the previous guidance range, which the broker suggests will mean cuts to consensus estimates.
With its forecasts being lowered the broker has trimmed its price target but given recent share price weakness it upgrades to an Outperform rating on valuation grounds.
Target price is $0.76 Current Price is $0.52 Difference: $0.24 If VBA meets the Macquarie target it will return approximately 46% (excluding dividends, fees and charges).
------------------------------------------------------------- BA-Merrill Lynch 04/05/2010 1 Buy, High Risk $0.85 71.7%
A Virgin-Air NZ ((AIZ)) alliance would boost revenues, strengthen VBA against Qantas ((QAN)) and add 5c to valuation, the broker suggests, but approval will likely take six months.
In the meantime, the broker has lowered its FY10 forecasts due to lowered guidance.
Target price is $0.85 Current Price is $0.52 Difference: $0.33 If VBA meets the BA-Merrill Lynch target it will return approximately 63% (excluding dividends, fees and charges).
------------------------------------------------------------- JP Morgan 04/05/2010 1 Overweight $0.80 61.6%
While JP Morgan feels the tie up with Air New Zealand ((AIZ)) would be beneficial to both airlines, the broker thinks it is likely to meet regulatory resistance.
Lowered FY10 guidance sees the broker cutting its FY10 profit forecasts by 35% and its target by 15c to 80c.
Target price is $0.80 Current Price is $0.52 Difference: $0.28 If VBA meets the JP Morgan target it will return approximately 54% (excluding dividends, fees and charges).
Target $0.80 (was $0.90). The broker has lowered its earnings estimates to reflect weaker demand and yields, the result being a cut to its price target for the stock.
Earnings growth in FY11 should be solid in the broker's view and given this its Outperform rating is retained.
Target price is $0.80 Current Price is $0.52 Difference: $0.28 If VBA meets the Credit Suisse target it will return approximately 54% (excluding dividends, fees and charges).
------------------------------------------------------------- Deutsche Bank 04/05/2010 1 Buy $0.85 71.7% Virgin has suggested FY10 earnings will be at the low end of guidance due to weakened demand in April including forward bookings through end 2010.
The broker expects some valuation downgrades but it is sticking with its own given expectation for a stronger FY11 due to a global aviation recovery.
Target price is $0.85 Current Price is $0.52 Difference: $0.33 If VBA meets the Deutsche Bank target it will return approximately 63% (excluding dividends, fees and charges).
------------------------------------------------------------- UBS 25/02/2010 1 Upgrade to Buy from Neutral $0.80 61.6%
Better cost controls saw the airline deliver a result that was above expectations, leading UBS to lift its recommendation to Buy from Neutral.
Like Qantas ((QAN)), management guidance is seen as conservative with the stock seen as good value trading at just 7x FY11 earnings.
UBS is of the view that the market will now focus more of this multiple and is of the view that the V Australia outlook has improved significantly.
Target rises 20c to 80c.
Target price is $0.80 Current Price is $0.52 Difference: $0.28 If VBA meets the UBS target it will return approximately 54% (excluding dividends, fees and charges).
VBA Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
